CANADA STOCKS-TSX rallies to 2-mth high on Fed comments, led by miners

Reuters Staff

3 Min Read

* TSX rises 110.48 points, or 0.87 percent, to 12,852.91
* Nine of 10 main sectors advance
* Gold shares add more than 4 percent
By John Tilak
TORONTO, May 22 (Reuters) - Canada's main stock index rose
on Wednesday to a two-month high, helped by gains across most
major sectors on optimism that the U.S. Federal Reserve will
keep its easy money policy in place for now.
Fed Chairman Ben Bernanke said the central bank's monetary
stimulus is helping the U.S. economy recover, and the central
bank needs to see further signs of traction before taking its
foot off the gas.
Bernanke's testimony fueled a jump in the price of bullion,
which often rises on commentary backing easy monetary policies,
and lifted shares of gold companies.
"Gold has rallied after the up-and-down performance of the
last two weeks," said John Ing, president of Maison Placements
Canada. "The silver lining is the drop in gold has sparked
tremendous physical buying."
Ing does not see the current easy money policy as
sustainable and said the end of monetary stimulus was
inevitable.
"The market, like a drug addict, is addicted to lower
interest rates," he said. "Even hints of higher interest rates
are enough to remove the props from the market."
The resource-heavy market advanced for the fourth straight
session and, with Wednesday's gains, is up more than 3 percent
on the year.
The Toronto Stock Exchange's S&P/TSX composite index
was up 110.48 points, or 0.87 percent, at 12,852.91.
It hit a session high of 12,856.99 earlier.
Nine of the 10 main sectors on the index were higher.
Gold shares, down about 37 percent since the start of the
year, gained more than 4 percent and helped lift the materials
sector nearly 3 percent.
Goldcorp Inc rose 4 percent to C$28.45, and Barrick
Gold Corp added 3.6 percent to C$20.60.
Energy shares rose 1.1 percent.
In company news, Talisman Energy said it expects to
remove the faulty platform at its Yme oilfield in the North Sea
next year and to submit a new plan for a new installation by the
first half of 2015. The stock fell 0.1 percent to C$12.14.
Financials, the index's most heavily weighted sector, were
up 0.6 percent.